Nexperia, a Dutch-based and Chinese-owned technology firm has bought Newport Wafer Fab (NWF), Britain's largest manufacturer of microchips, which has prompted the UK government's national security advisor to launch a probe over fears of national security.
Semiconductor. Credit: Connect world / Shutterstock
Chinese-backed Nexperia recently acquired UK-based Newport Wafer Fab, sparking a probe over national security. Credit: Connect world / Shutterstock
The tech firm reportedly offered as much as £63 million (€73.3 million) for the chipmaker. This comes in the middle of the global semiconductor shortage which has lead to bottlenecks for the automotive and electronics industries.
Read more: The semiconductor shortage may last into 2022
Nexperia, despite being founded and based in the Netherlands, is owned by China's Wingtech, which has lead to questions being raised about intentions and possible national security threats. Many of the company's investors are state-backed.
Newport Wafer Fab is located in Newport, Wales.
Of late, many UK automakers and tech firms are looking to domestically source chips to make their supply chains more robust and to allow them to become less reliant on predominantly East Asian suppliers.
Prime Minister Boris Johnson confirmed on Thursday he would be getting his national security advisor, Sir Stephen Lovegrove to investigate the purchase.
“We are looking into it. I have asked the National Security Adviser to review,” he said in a statement.
NWF is primarily based in the city of Newport in Wales, but also operates smaller plants in Manchester and Hamburg.
The plant reportedly makes over 35,000 wafers per month, covering a wide variety of semiconductor technologies,
The purchase has also protected some 400 jobs at the factory. NWF's outstanding debts, including an £18 million investment by the Welsh government, will also be recuperated.
In a statement, Nexperia revealed it would “continue to have a strong position in the Welsh ecosystem and technology development and will secure the current jobs at the Newport site."
Nexperia's CEO Achim Kempe said of the deal: “We are very excited to include Newport as part of our global manufacturing footprint. Nexperia has ambitious growth plans and adding Newport supports the growing global demand for semiconductors.
"The Newport facility has a very skilled operational team and has a crucial role to play to ensure continuity of operations. We look forward to building a future together."
Companies such as Nissan are overhauling their industrial production to account for chip-making to deal with the shortage.
Read more: Nissan announces £1bn Sunderland gigafactory to boost EV production
Other key industry players have also begun investing in gigafactories in a bid to deal with the shortage through domestic production.
Demand for chips is continuing to increase and analysts are still unsure when the shortage will end.
Many analysts predict a spillover into 2022, while others suggest the shortage will continue until at least 2023.
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